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December 9, 2024

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As gold and silver continue to prove their worth as sound investments, market participants should know how precious metals investments are taxed in the US.

While the majority of gold and silver investing comes with a certain degree of taxation, there are different levels of tax based on how market participants decide to invest in these precious metals, how long the investments are held for and the investors individual tax bracket.

Read on for a breakdown of the taxes associated with investing in gold and silver bullion, ETFs and stocks, as well as the forms involved with reporting precious metals investments.

In this article

    How are physical gold and silver taxed?

    Gold and silver bullion, coins and bars are seen as collectibles by the Internal Revenue Service (IRS) in the US. Thus, physical gold and silver, no matter the form, are subject to a higher rate of capital gains tax when they are sold. The same is true for fellow precious metals platinum and palladium.

    While long-term capital gains would typically carry a top bracket of 20 percent, collectibles can be taxed at a higher 28 percent.

    The total an investor will owe in capital gains tax when selling physical gold and silver is based both on their income bracket and the length of time they held the asset.

    The long-term capital gains tax on physical gold and silver is equal to an investor’s marginal tax rate, up to a maximum of 28 percent due to their status as a collectible, meaning those in higher tax brackets still only have to pay 28 percent on long-term gains from physical precious metals sales.

    It is worth noting that the 28 percent maximum is only for long-term capital gains, which applies to metals that an investor has held for more than one year. Short-term capital gains on precious metals held for less than one year are taxed at ordinary income rates.

    For example, a person in the highest tax bracket purchased 100 ounces of physical gold at US$1,800 per ounce and two years later sold their holdings for US$2,000 per ounce. While they are in the 37 percent tax bracket, they would pay 28 percent tax on the capital gains made from these sales. As they earned US$20,000 in capital gains, that would translate to US$5,600 in income tax.

    However, if the investor sold the gold at the same gain just 11 months after they purchased it, it would count as short-term capital gains, and the investor would be taxed at 37 percent and owe US$7,400.

    Investors who are in one of the tax brackets below 28 percent are taxed at the standard rate of their bracket when selling their solid gold and silver assets, whether they are held short- or long-term.

    Similarly to other investments, precious metals sold at a loss can be used to offset capital gains.

    How are gold and silver ETFs taxed?

    Like all other exchange-traded funds (ETFs), gold ETFs and silver ETFs act in the same manner as individual stocks, meaning that investing in these ETFs is similar to trading a stock on an exchange. There are two main types of gold and silver ETFs: those that track the prices of those metals and those that track gold or silver stocks.

    ETFs that follow metals prices provide exposure to either physical gold or silver, or gold or silver futures contracts. It is important to keep in mind that investing in these ETF platforms does not allow investors to own any physical gold or silver — in general, even an investment in an ETF that tracks physical gold or silver cannot be redeemed for the tangible metal.

    ETFs that invest in gold or silver companies provide exposure to gold- and silver-mining stocks, as well as gold- or silver-streaming stocks.

    In terms of taxation, capital gain taxes from selling gold and silver ETFs is determined by the ETF’s holdings, the investors tax bracket and how long they held the asset for.

    Funds will often supply investors with tax forms that they can use to fill out their income tax. The webpage for a fund should have a document describing how income tax is handled for that fund, which is worth reading before investing in it.

    Long-term capital gains from selling shares of gold and silver ETFs are subject to a 28 percent maximum federal income tax rate if they hold physical precious metals and 20 percent if they hold stocks. While long-term capital gains would typically be capped at 20 percent maximum rate. This is because the holdings are considered collectibles, as described in the section above. Short-term gains made from selling gold or silver ETFs are subject to a maximum federal rate of 37 percent.

    Additionally, these gains could get slapped with a 3.8 percent net investment income tax for high net-worth investors, and a state income tax may also apply.

    Futures-based commodity ETFs can come with their own set of rules that you can learn about here. Briefly, they are often taxed in a 60/40 hybrid, with 60 percent treated as long-term gains and 40 percent treated as short-term gains. Additionally, this is calculated at the end of each tax year, whether a sale is made or not.

    ETFs that hold stocks are taxed in the same way as traditional securities, which you can read more about below.

    How are gold and silver stocks taxed?

    In terms of tax on gold and silver stocks, long-term gains from selling are subject to the standard 20 percent maximum federal rate, while short-term gains will face a maximum federal rate of 37 percent. For investors in higher income brackets, there is the potential for gold and silver stock investments to also be hit with the 3.8 percent net investment income tax as well as state income tax.

    Unlike physical precious metals and ETFs that hold them, precious metals stocks are not classified as collectibles, which is why the long-term capital gains tax is capped at 20 percent instead of 28 percent.

    Stocks sold at a loss are important as well as they can be used to offset capital gains when filing income tax.

    How to report taxes on physical gold and silver investments

    Market participants who sell precious metals in the US for a profit are required to report that profit on their income tax return, regardless of whether or not the dealer has any reporting obligation.

    When selling gold and silver investments in the US, there are two different sets of reporting guidelines — one applies to the dealer through which a person sells and the other applies to the investor who is selling the asset.

    It is important to note that taxes on the sale of gold and silver will not be due the moment that the sale is made, and the tax bill for all of these sales is due at the same time as a standard income tax bill.

    For investors selling precious metals, capital gains or losses need to be reported on Schedule D of Form 1040 when making a tax return.

    Investors will first need to detail their precious metals transactions on Form 8949, including the length of time the investments were held. This form must be filed alongside Schedule D. Investors then use this information alongside the 28% Rate Gain Worksheet included in the Schedule D instructions.

    Depending on the type of metal being sold, Form 1099-B may have to be submitted to the IRS by the broker when the sale closes, as such transactions are considered income. As for when a broker will need to file Form 1099-B, there are specific rules that determine which sales of precious metals require the dealer to file this form that apply to transactions over a 24 hours period.

    For gold sales, reportable items include specific gold coins, including the 1 ounce Canadian Gold Maple Leaf and Gold Kruggerand, and gold bars and rounds of at least 0.995 fineness. As for quantity, only sales of more than 25 gold coins and or more than 1 kilogram in gold bars and rounds will require the form.

    Sales of 0.999 fine silver bars and rounds totaling over 1,000 ounces qualify. For silver coins, US coins with above 90 percent silver are reportable, but Silver American Eagle coins are not. Sales of silver coins exceeding US$1,000 will require a form.

    When it comes to selling gold and silver overseas, market participants must follow the laws as they apply to the sale of gold and silver investments in that particular country.

    The information in this article does not constitute tax advice, and investors should work with a tax professional or program to help them make sure everything is reported accurately.

    Securities Disclosure: I, Lauren Kelly, currently hold no direct investment interest in any company mentioned in this article.

    This post appeared first on investingnews.com

    Rio Tinto ( ASX:RIO,NYSE:RIO,LSE:RIO) released an initial mineral resources and ore reserves report for its 100 percent owned Argentina-based Rincon project on Wednesday (December 4).

    Mineral resources inclusive of ore reserves comprise 1.54 million tonnes of lithium carbonate equivalent in the measured category, with 7.75 million tonnes in the indicated category and 2.29 million tonnes in the inferred category.

    Probable ore reserves are made up of 2.07 million tonnes of lithium carbonate equivalent.

    Rincon was acquired by Rio Tinto from Rincon Mining in March 2022. It is located in the Lithium Triangle of Argentina’s Salta province, which hosts more than half of the world’s lithium reserves.

    A feasibility study for the property outlines full-scale production of approximately 53,000 tonnes of battery-grade lithium carbonate annually over a 40 year mine life. Subject to permitting, Rio Tinto plans to expand production at the site to 60,000 tonnes per year via debottlenecking and improvement programs.

    The company expects to make a final investment decision on full-scale operations at Rincon toward the end of 2024.

    A pilot battery-grade lithium carbonate plant with a capacity of 3,000 tonnes is currently in development. According to the company, it is scheduled for completion in the first half of 2025.

    Argentina’s lithium reserves are the third largest in the world, standing at 3.6 million tonnes. The country is also the fourth largest lithium producer in the world, producing 9,600 tonnes of the metal in 2023.

    Securities Disclosure: I, Gabrielle de la Cruz, hold no direct investment interest in any company mentioned in this article.

    This post appeared first on investingnews.com

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    “This means everything. I represent so much here. I represent the recovery community. The dog rescue community. … This is going to be able to take us to the next level.”

    Knight’s journey began in 2011, when at the age of 51, he had lost everything to meth addiction – his family, his job, his home, and nearly his life. HIV positive, and living out of his car, Knight entered rehab at the behest of his mother.

    After months of treatment, and at a delicate time in his recovery, Knight’s life changed when a friend showed up at his door in tears. She had relapsed, and in her arms was her beloved dog, Jayde. Knight’s friend said no one would take Jayde, and she asked Knight for a ride to a shelter so she could surrender her.

    “I looked at Jayde, and we looked at each other,” Knight said. “It was one of the most spiritual moments, like ‘I think we might need each other here.’”

    Knight soon realized that other people were delaying or forgoing treatment because they could not find safe housing for their pets. He sought advice on best practices from a local animal rescue and educated himself on foster care protocol.

    “These shelters are running 150 percent over capacity. If you’re over capacity, then you start euthanizing dogs,” Knight said. “We cannot have the solution be euthanize dogs. We can’t.”

    1,200 dogs and counting

    In 2015, Knight’s organization, Dogs Matter, became a registered nonprofit, and he buttoned up his program – vetting applicants, conducting animal behavior assessments, and executing contracts that require participants to stick to their recovery plan and complete a 12-month post-release wraparound program.

    Today, Knight lives with his three dogs, Jayde, Piper and Lady, and his organization has helped more than 1,200 dogs and their owners. As Knight approaches 14 years clean and sober, he hopes to make Dogs Matter a national model program, with the goal of giving other animals and their humans the same second chance at life that he got.

    “I share this award with Jayde. She’s the reason why I did this. One act of kindness and then to have that dream and that goal to be able to help others and do one step at a time to get there. And…1,200 dogs later it’s amazing. It’s just beginning too.”

    A night celebrating selflessness

    During his acceptance remarks, Fox shared the honor with others.

    “I’m very proud on behalf of all the people with Parkinson’s and their families who’ve fought so hard for a cure and fought so hard for answers and new drugs in the pipeline, and through our foundation have found a way to realize that.”

    You can get involved

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    A commander of South Korea’s special forces has apologized for ordering his troops to storm parliament last week after martial law was declared, saying he placed them in “grave danger.”

    Col. Kim Hyun-tae, commander of South Korea’s 707 Special Task Force, described himself to reporters at a Monday briefing as an “incompetent and irresponsible commander” when he authorized troops to storm the National Assembly during President Yoon Suk Yeol’s short-lived imposition of martial law.

    “I ordered the deployment to the National Assembly. As the on-site commander for the 197 troops involved, I was the first to arrive by a helicopter. I instructed them to seal the building, engage in physical confrontations at the front and rear gates, break windows, and enter the premises,” he said.

    “If such orders had been given in combat, everyone would have died,” he added. “These troops are the most tragic victims of this situation. They are not guilty. Their only fault lies in following the orders of an incompetent commander. Please forgive them.”

    Kim also blamed the country’s former defense minister Kim Yong-hyun for “exploiting” soldiers during the chaotic night.

    South Koreans watched in disbelief when President Yoon declared martial law in a shocking televised announcement late Tuesday. Defying the military decree, protesters gathered outside to demand Yoon’s resignation.

    In a night of high drama, lawmakers forced their way past nearly 300 troops deployed outside the National Assembly building, and unanimously voted to block the decree, which the president was legally bound to obey – effectively reversing the president’s unilateral order.

    One of the defining scenes to emerge from the night was a video of journalist-turned-politician An Gwi-ryeong grabbing a soldier’s gun as lawmakers faced off against troops who had blocked their way into the parliament building.

    Kim pleaded for understanding and forgiveness for his soldiers, who he said were merely following his commands.

    “Right now, my troops are suffering immensely, and their families – wives and children – are watching this unfold in agony,” he said.

    Kim added he would accept full responsibility for his actions and face any legal consequences: “I will bear the burden for everything they have done.”

    South Korea’s national police are investigating Yoon, former defense minister Kim Yong-hyun and other top officials for alleged treason. Kim Yong-hyun was detained by prosecutors on Sunday.

    The night of extraordinary events sent shock waves across the country and the world.

    The declaration of a military emergency, though lasting six hours, was met with shock and anger across the country, which remains deeply scarred by the brutality of martial law imposed during decades of military dictatorship before it won a long, bloody fight for democracy in the 1980s.

    While Yoon survived an impeachment vote in an opposition-led parliament on Saturday, his political survival hangs in tatters. His party said they will seek Yoon’s resignation and urged the president to be suspended from duties to protect the country from “grave danger.”

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    An arson attack on a synagogue in Melbourne last week is being investigated as terrorist incident, Australian officials said Monday, as the government announced it was establishing a new task force to combat antisemitism.

    The Adass Israel Synagogue in the city’s south – one of Australia’s most significant Jewish centers – burst into flames early on Friday sending worshippers fleeing during overnight prayers.

    Victoria Police Chief Commissioner Shane Patton on Monday said the “horrific, callous and targeted” attack was “likely a terrorist incident” and would be investigated by a joint counter-terrorism team including Victoria Police, the Australian Federal Police (AFP) and Australian Security Intelligence Organisation (ASIO).

    Patton said police were searching for three suspects in connection with the firebombing but would not go into detail about their identities or whether they were known to police.

    There was no evidence to suggest there would be any more attacks against other synagogues in Melbourne, said Patton, who added that officers would continue to patrol areas with a large Jewish population.

    Australian Prime Minister Anthony Albanese said Friday’s fire at the Melbourne synagogue was the third antisemitic attack in recent months.

    The Australian Federal Police had established a special task force called Operation Avalite to respond to the attacks, which include a fire at a Jewish minister’s Melbourne office and vandalism targeting cars in a Jewish area of Sydney.

    AFP Commissioner Reece Kershaw said the national force would play a greater role in policing threats, violence and hatred toward the Jewish community.

    “Unfortunately, in Australia today those of Jewish ethnicity and religion are being targeted because of who they are,” he said. “The AFP will not tolerate crimes that undermine Australia’s security or our way of life.”

    On the weekend, the Albanese government committed an extra 32.5 million Australian dollars (close to $21 million) to increase security at Jewish community sites across the country, including synagogues and schools.

    Jewish communities across Australia have called out a drastic increase in antisemitic attacks since the Hamas attacks on October 7, 2023 and Israel’s ensuing war in Gaza.

    Israeli Prime Minister Benjamin Netanyahu condemned the Melbourne attack as “an abhorrent act of antisemitism,” and linked the firebombing to the Australian government’s support of a United Nations resolution calling on Israel to end all hostilities in Gaza.

    “Unfortunately, it is impossible to separate this reprehensible act from the extreme anti-Israeli position of the Labor government in Australia, including the scandalous decision to support the UN resolution calling on Israel ‘to bring an end to its unlawful presence in the Occupied Palestinian Territory, as rapidly as possible,’” the Prime Minister’s Office statement said on Friday.

    The statement also pointed to Australia’s decision to stop former Israeli minister Ayelet Shaked from entering the country for a speaking tour. Australia’s home affairs minister said Shaked was denied a visa over fears her presence would undermine social cohesion.

    Of the UN vote, Albanese said Monday that Australia cast its vote along with 157 nations – including most of its Five Eyes partners – and that its position on the conflict hadn’t changed.

    “Australia has had for a long period of time … a bipartisan position for a two-state solution in the Middle East … that is still my government’s position,” he said.

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    Long-suffering Syrians have been rejoicing in the streets after one of the world’s most brutal dictatorships suddenly crumbled in a few short weeks.

    For half a century, the Assad family ruled over Syria with an iron fist, with long-documented reports of mass incarceration torture, extra-judicial killings and atrocities against their own people.

    A civil war that started during the 2011 Arab Spring ravaged the country and turned it into a breeding ground for extremist group ISIS, while sparking an international proxy war and refugee crisis that saw millions displaced from their homes.

    On Sunday, after 13 years of civil war that fractured the country, rebel fighters declared Damacus “liberated” in a video statement on state television, sending Syrian President Bashar al-Assad fleeing to Russia.

    Video showed prisoners being freed from Assad’s notorious detention facilities, rebels and civilians were seen ransacking the presidential palace, with footage revealing his luxurious lifestyle and large car collection.

    Many in the country are hopeful that Syria could finally be free, but there’s huge uncertainty over what comes next.

    Here’s what we know.

    What happened?

    An armed rebel alliance charged across Syria over 11 days, sweeping through major cities and reigniting a conflict that had been largely static since a 2020 ceasefire agreement.

    A new rebel coalition, led by the militant group Hayat Tahrir al-Sham (HTS) launched a surprise attack and took control Syria’s largest city Aleppo on November 30, a seismic move that met little resistance from the Syrian army.

    Syrian and Russian jets had targeted rebels in Aleppo and Idlib but opposition forces seized a second major city of Hama and quickly advanced on Homs – the gateway to the capital Damascus.

    As Homs fell, rebels encircled and marched into Damascus, declaring Assad overthrown and the city “liberated.”

    Who are the rebels?

    Syria’s rebel coalition is a new grouping called the “Military Operations Command.” It’s made up of various Islamist and moderate factions who, despite their differences, are united in fighting the Assad regime, ISIS and Iran-backed militias.

    They’re led by Abu Mohammad al-Jolani, the head of militant group HTS, a former al Qaeda affiliate in Syria that used to go by the name Al-Nusra Front.

    HTS officially cut ties with al Qaeda and has been the de facto ruler in Idlib.

    But HTS is only one of numerous armed groups operating in Syria. Other groups controlling territory in the country include the Turkey-backed Syrian National Army and the Kurdish-led Syrian Democratic Forces, elements of which Turkey views as a terrorist organization.

    The United States, Turkey, the United Nations and several other Western nations continue to designate HTS as a terrorist organization, and the US has placed a $10 million bounty on Jolani.

    In his first public remarks since the rebel-led coup, Jolani declared victory on Sunday for the “entire Islamic nation.”

    The rebel leader has sought to diminish the shadow of his extremist roots, and one commander insisted in a state TV address on Sunday that “all sects” would be protected.

    But millions of Syrians, including those from minority Christian and other religious communities, remain haunted by a legacy of persecution suffered at the hands of extremist groups like al Qaeda and ISIS.

    Who is Bashar al-Assad?

    Assad is the second generation of an autocratic family dynasty that held power in Syria for more than five decades.

    A former ophthalmologist who studied in London, Assad took power in an unopposed election following the death of his father Hafez al-Assad, who had led the Baath Party since seizing power in 1970.

    Like his father, Assad tolerated little dissent and throughout the 13-year civil war, he and his forces have been accused of severe human rights violations and brutal assaults against civilians, with reports of using starvation as a weapon of war, enforced disappearances and killings, and the deliberate bombing of civilian buildings like schools and hospitals.

    Among Assad’s worst atrocities was the 2013 sarin gas attack in the city Ghouta, which killed more than 1,400 people and was labeled a war crime by the then-UN Secretary General.

    Assad’s notorious detention facilities were black holes where anyone deemed an opponent of the regime disappeared, with widespread reports of torture and inhumane conditions. In 2017, an Amnesty International report claimed as many as 13,000 people had been hanged from 2011 to 2015 at Saydnaya Prison.

    Why did this come about and what’s next?

    Rebels capitalized on a weakened government whose key allies are heavily preoccupied with other conflicts.

    Russia’s grinding war in Ukraine since 2022 has sucked in manpower and resources, leaving little jets and troops for key ally Syria.

    Iran has been hamstrung as its war with Israel escalated in the past year. Its main proxy Hezbollah has been decimated by Israeli attacks and airstrikes.

    The anti-regime coalition is now disbanding Assad’s military, laying out its vision for a post-Assad Syria.

    But experts wonder if the next phase will be a new dawn for a people strangled by a brutal autocracy – or whether sectarianism will bring a different type of authoritarian rule.

    US President Joe Biden described the fall of the Assad regime as an “historic opportunity for the long-suffering people of Syria to build a better future” but cautioned it was also a moment of risk and uncertainty in the region.

    Iran’s ambassador to Syria Hossein Akbari warned that the fallout from the collapse of Assad’s regime will be beyond American control and could lead to a conflict involving regional countries and Turkey.

    Questions are now focused on what a new governing system in Syria would look like, and how it will work given the disparate groups and interests involved, and whether the reordering of power will only lead to further instability.

    For now, Syrians across the world are celebrating the stunning and unexpected political turn that caught much of the world off guard.

    This post appeared first on cnn.com